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    Aboitiz vs. General Accident Fire and Life Assurance Co.-Done

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    Midori San
    The case involved three consolidated petitions regarding whether the shipowner, Aboitiz Shipping Corporation, could invoke the real and hypothecary doctrine to limit its liability for cargo lost when the M/V P. Aboitiz sank. While the doctrine typically limits a shipowner's liability to the value of the vessel, it does not apply if there is actual fault or negligence of the shipowner. The courts found that Aboitiz and the crew were negligent in failing to ensure the seaworthiness of the vessel and take actions to prevent it from sailing into a typhoon, resulting in the sinking. As such, Aboitiz could not avail itself of limited liability under the real and hypothec

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    Aboitiz vs. General Accident Fire and Life Assurance Co.-Done

    Uploaded by

    Midori San
    1K views2 pages
    The case involved three consolidated petitions regarding whether the shipowner, Aboitiz Shipping Corporation, could invoke the real and hypothecary doctrine to limit its liability for cargo lost when the M/V P. Aboitiz sank. While the doctrine typically limits a shipowner's liability to the value of the vessel, it does not apply if there is actual fault or negligence of the shipowner. The courts found that Aboitiz and the crew were negligent in failing to ensure the seaworthiness of the vessel and take actions to prevent it from sailing into a typhoon, resulting in the sinking. As such, Aboitiz could not avail itself of limited liability under the real and hypothec

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    The case involved three consolidated petitions regarding whether the shipowner, Aboitiz Shipping Corporation, could invoke the real and hypothecary doctrine to limit its liability for cargo lost when the M/V P. Aboitiz sank. While the doctrine typically limits a shipowner's liability to the value of the vessel, it does not apply if there is actual fault or negligence of the shipowner. The courts found that Aboitiz and the crew were negligent in failing to ensure the seaworthiness of the vessel and take actions to prevent it from sailing into a typhoon, resulting in the sinking. As such, Aboitiz could not avail itself of limited liability under the real and hypothec

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as ODT, PDF, TXT or read online from Scribd
    Download as odt, pdf, or txt
    1K views2 pages

    Aboitiz vs. General Accident Fire and Life Assurance Co.-Done

    Uploaded by

    Midori San
    The case involved three consolidated petitions regarding whether the shipowner, Aboitiz Shipping Corporation, could invoke the real and hypothecary doctrine to limit its liability for cargo lost when the M/V P. Aboitiz sank. While the doctrine typically limits a shipowner's liability to the value of the vessel, it does not apply if there is actual fault or negligence of the shipowner. The courts found that Aboitiz and the crew were negligent in failing to ensure the seaworthiness of the vessel and take actions to prevent it from sailing into a typhoon, resulting in the sinking. As such, Aboitiz could not avail itself of limited liability under the real and hypothec

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as ODT, PDF, TXT or read online from Scribd
    Download as odt, pdf, or txt
    of 2

    CASE: ABOITIZ SHIPPING CORPORATION VS.

    COURT OF APPEALS, MALAYAN INSURANCE


    COMPANY, INC., COMPAGNIE MARITIME DES CHARGEURS REUNIS, AND F.E. ZUELLIG (M),
    INC.

    FACTS:
    Before this Court are three consolidated petitions involving the issue of whether the real and
    hypothecary doctrine may be invoked by the shipowner in relation to the loss of cargoes occasioned by
    the sinking of M/V P. Aboitiz.

    Respondent Malayan Insurance Company, Inc. filed five separate actions against several defendants for the
    collection of the amounts of the cargoes allegedly paid by Malayan under various marine cargo policies issued
    to the insurance claimants. In the five consolidated cases, Malayan sought the recovery of amounts totaling
    P639,862.02. Aboitiz raised the defenses that M/V P. Aboitiz was seaworthy, that it exercised extraordinary
    diligence and that the loss was caused by a fortuitous event.

    ISSUE: WHETHER OR NOT THE REAL AND HYPOTHECARY DOCTRINE MAY BE INVOKED
    BY THE SHIPOWNER TO LIMIT ITS LIABILITY.

    HELD: The principal issue common to all three petitions is whether Aboitiz can avail limited liability on the
    basis of the real and hypothecary doctrine of maritime law. Corollary to this issue is the determination of actual
    negligence on the part of Aboitiz.

    In the 1993 GAFLAC case, the Court applied the limited liability rule in favor of Aboitiz based on the trial
    court's finding therein that Aboitiz was not negligent. The Court explained, thus: x x x In the few instances
    when the matter was considered by this Court, we have been consistent in this jurisdiction in holding that the
    only time the Limited Liability Rule does not apply is when there is an actual finding of negligence on the
    part of the vessel owner or agent.

    A careful reading of the decision rendered by the trial court in Civil Case No. 144425 as well as the entirety of
    the records in the instant case will show that there has been no actual finding of negligence on the part of
    petitioner.

    The ruling in the 1993 GAFLAC case cited the real and hypothecary doctrine in maritime law that the
    shipowner or agent's liability is merely co-extensive with his interest in the vessel such that a total loss
    thereof results in its extinction. "No vessel, no liability" expresses in a nutshell the limited liability rule.

    In this jurisdiction, the limited liability rule is embodied in Articles 587, 590 and 837 under Book III of the
    Code of Commerce, thus: Art. 587. The ship agent shall also be civilly liable for the indemnities in favor of
    third persons which may arise from the conduct of the captain in the care of the goods which he loaded on the
    vessel; but he may exempt himself therefrom by abandoning the vessel with all her equipment and
    thefreight it may have earned during the voyage.

    Art. 590. The co-owners of the vessel shall be civilly liable in the proportion of their interests in the common
    fund for the results of the acts of the captain referred to in Art. 587. Each co-owner may exempt himself from
    this liability by the abandonment, before a notary, of the part of the vessel belonging to him.
    Art. 837. The civil liability incurred by shipowners in the case prescribed in this section, shall be understood as
    limited to the value of the vessel with all its appurtenances and freightage served during the voyage.

    These articles precisely intend to limit the liability of the shipowner or agent to the value of the vessel, its
    appurtenances and freightage earned in the voyage, provided that the owner or agent abandons the vessel.
    When the vessel is totally lost in which case there is no vessel to abandon, abandonment is not required.
    Because of such total loss the liability of the shipowner or agent for damages is extinguished. However, despite
    the total loss of the vessel, its insurance answers for the damages for which a shipowner or agent may be
    held liable.

    Nonetheless, there are exceptional circumstances wherein the ship agent could still be held answerable
    despite the abandonment of the vessel, as where the loss or injury was due to the fault of the shipowner
    and the captain. The international rule is to the effect that the right of abandonment of vessels, as a legal
    limitation of a shipowner's liability, does not apply to cases where the injury or average was occasioned by the
    shipowner's own fault. Likewise, the shipowner may be held liable for injuries to passengers notwithstanding
    the exclusively real and hypothecary nature of maritime law if fault can be attributed to the shipowner.

    There is a categorical finding of negligence on the part of Aboitiz. For instance, the captain of M/V P. Aboitiz
    was negligent in failing to take a course of action that would prevent the vessel from sailing into the typhoon.
    Aboitiz failed to show that it had exercised the required extraordinary diligence in steering the vessel
    before, during and after the storm.Thus, Aboitiz is not entitled to the limited liability rule and is, therefore,
    liable for the value of the lost cargoes as so duly alleged and proven during trial.

    As a general rule, a ship owner's liability is merely co-extensive with his interest in the vessel, except
    where actual fault is attributable to the shipowner. Thus, as an exception to the limited liability doctrine, a
    shipowner or ship agent may be held liable for damages when the sinking of the vessel is attributable to the
    actual fault or negligence of the shipowner or its failure to ensure the seaworthiness of the vessel. The instant
    petitions cannot be spared from the application of the exception to the doctrine of limited liability in view of the
    unanimous findings of the courts below that both Aboitiz and the crew failed to ensure the seaworthiness of the
    M/V P. Aboitiz. WHEREFORE, the petitions are DENIED.

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